Wall Street hovers near records as oil swings

On Tuesday, US stocks hovered close to record highs as oil prices continued to fluctuate due to uncertainty surrounding the conflict with Iran. The S&P 500 ended the day 0.2 percent lower, still near its all-time high reached on Friday. Meanwhile, the Dow Jones Industrial Average and Nasdaq Composite both experienced slight declines, with the Dow down 67 points (0.1 percent) and the Nasdaq falling 0.5 percent, respectively.

In the oil market, the price of Brent crude briefly surpassed $90 per barrel in the morning before settling at $88.66, marking a 1.1 percent increase from Monday's settlement price. Oil price volatility has become commonplace since the United States and Israel launched attacks on Iran in late February, resulting in the closure of the Strait of Hormuz and the accumulation of much of the world's oil supply in the Middle East. Over the past month, the price of Brent crude oscillated between $72 and $102 per barrel.

This market turbulence has drawn Wall Street's attention towards Wednesday, when the US government is set to release the latest monthly inflation data. Economists anticipate that inflation will remain high but show signs of deceleration, with the July figure expected to be around 3.4 percent, compared to 3.5 percent in June. Lower inflation could potentially aid the Federal Reserve, which is divided on whether to raise interest rates to curb inflationary pressures.

However, higher interest rates could also slow down the US economy by making borrowing more expensive for households and businesses, ultimately impacting stock prices.

Traders are uncertain if the Federal Reserve will raise its benchmark interest rate at the upcoming September meeting, with only a 50-50 chance according to CME Group data. If the Fed does raise rates, it would be the first increase in over three years. This move could anger President Donald Trump, who has been advocating for lower interest rates. Consequently, Treasury yields have risen since the Iran war, pushing long-term mortgage rates to their highest levels in a year.

On Wall Street, Cardinal Health reported stronger-than-expected profit for the spring and gained 0.2 percent. Another company, Aramark, surged 9.4 percent after exceeding analyst forecasts for profit and revenue in the latest quarter. In contrast, On Holding, a Swiss sneaker manufacturer, slipped 19.3 percent despite surpassing profit expectations, due to lower revenue growth than anticipated.

Intel decreased 0.1 percent after announcing a larger-than-planned stock sale at $95 per share, which diluted existing shareholder value. Intel plans to utilize the raised cash for investments aimed at capitalizing on the growing demand for artificial intelligence technology.

In global markets, European stock indexes were mixed following a volatile finish in Asia. Hong Kong's Hang Seng index fell 1.1 percent, marking one of the biggest declines in the world.